Power couple, live-in friend embroiled in custody battle for the ages

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In a mansion by the sea, they lived as one big family.

Orange County power couple Lawrence and Kristina Dodge resided in the ocean-view main house in Monarch Bay, along with their teenage daughter and 2-year-old triplet girls. Their friend, DeAun Nixon, and her four teenage children – including another set of triplets – piled into the downstairs granny pad, rent free.

The Dodges talked publicly about how they were 11 people under one roof, a family so unusual they pitched a reality show to cable TV producers. Key to the pitch was this: Nixon, 51, was the surrogate birth mother to the triplet girls sired by Lawrence Dodge, 73.

The project fell through.

Then the fantasy crumbled.

Lawrence Dodge, who made his fortune in banking, was accused in 2009 of violating federal banking regulations and was barred from the industry, a decision he is fighting. The Dodges filed for bankruptcy protection on Dec. 5, 2012 – the same day their $9.3 million home was taken back by their lender, though they remain on the property.

And the relationship between the Dodges and Nixon soured. Even before the foreclosure, the Dodges were evicting Nixon and her children from the home. She has yet to move.

Critically, Nixon has filed for parental rights for the three girls she bore with a donor's eggs and sperm from Lawrence Dodge, then 71.

Lawrence and Kristina Dodge, 51, are shuffling among bankruptcy court, family court and Superior Court, where they are being accused in a lawsuit of reneging on a $4 million pledge to an art institute in Kansas City.

Although they confirmed the surrogacy, the Dodges declined to comment for this article.

Nixon isn't so shy.

“We were this modern-day family. There was no discussion that this was going to end, that it was going to be over,” Nixon said recently as she perched at the kitchen bar inside the seaside granny pad. The Pacific Ocean sparkled through the open glass doors, waves roaring in the background.

“I'm a little naive,” Nixon added. “I'm a Kansas girl at heart. When I care about people, I would do anything for them.”

Experts say the surrogacy case is a legal mess and another in a long line of examples why fertility procedures should be better regulated.

“This case is like a poster … of why you need more oversight,” said New York University Professor Arthur Caplan, one of the country's premier bioethicists.

“This case is moving uncomfortably into the realm of ‘Octomom.' ”

Flush with cash

Not so long ago, the Dodges were handing out dollars like business cards. They gave millions to the Segerstrom Center for the Arts and St. Margaret's Episcopal School among others. Their $20 million donation to Chapman University in 2004 was the second largest in school history and helped create the Dodge College of Film and Media Arts.

The duo also used their cash to power political campaigns. The Center for Investigative Reporting named Lawrence Dodge one of the top 10 rainmakers in California, contributing $6.8 million to Republican campaigns between 2006 and 2010. Kristina Dodge still sits on the governor-appointed OC Fair board and on Chapman University's board of trustees.

Raised on a Redlands citrus farm, Lawrence Dodge was just 27 when he became chief executive of a national insurance group. In 1977, he founded Irvine-based American Sterling Group, insurance, banking and finance businesses that had more than $300 million in assets.

The Dodges seemed flush with cash a decade ago when Kristina Dodge and Nixon met. Both women had children at St. Margaret's Episcopal School in San Juan Capistrano. Kristina Dodge told the British magazine Fabulous that at the time she noticed Nixon's triplets and was curious about whether they were born after some type of fertility treatment. (They were.) Nixon said the two women became fast friends, vacationing together in Cabo San Lucas and Las Vegas. The women also took their children on a family vacation to Hawaii, Nixon said.

Then the wheels came off American Sterling Bank.

During the mid-2000s, Lawrence Dodge began overstating capital on the bank's books and records, according to a notice of civil penalties from the federal Office of Thrift Supervision, now the Office of the Comptroller of the Currency. He was fined $1 million.

“Respondent's violation of laws and regulations and/or unsafe and unsound practices involved personal dishonesty on his part and/or a willful and continuing disregard for the safety and soundness of an insured depository institution,” said the federal notice.

Federal officials seized the bank in April 2009 and sold it to Metcalf Bank. Even as their finances were evaporating, the Dodges reached out to help Nixon when her second marriage was crumbling. By July of that year, the Dodges invited Nixon and her children to move into their 3,970-square-foot mansion.

“It was like an extended family,” Nixon said. “Both of them said, ‘You're not going to be without a place to live.' They never asked me for rent, but I contributed when I could.”

Striking a deal

By early 2010, Kristina Dodge had been in a fertility program for more than a decade, going through at least 21 in vitro cycles, but she still hadn't had a second child. Then, after a surrogate deal with another woman fell through, Nixon said she contributed to the family in a big way – offering to be a surrogate birth mother for the Dodges.

“I said, ‘Let me carry your children,' ” remembered Nixon, who was then 48. “I felt like we were a family, and we were creating a bigger family.”

Nixon had plenty of experience with in vitro fertilization, the process of fertilizing an egg outside the body. All four of her children were conceived through fertility techniques using her eggs.

Nixon and the Dodges signed a surrogacy contract. But a close look shows that the document pertained to the former prospective surrogate. The face page and signature page were changed for Nixon, but the rest of the document applies to the other woman, including provisions to have the baby in Nevada and references to a surrogacy center that was not used. The contract also stipulates that the birth mother “does not desire to have a parental relationship” with the children who might be born as a result of the agreement.

The eggs were donated, and then were implanted by Dr. Brian Acacio, a fertility specialist in Laguna Niguel, Nixon said. She said Acacio is the one who wanted a contract. A state law went into effect Jan. 1, requiring all parties involved in an in vitro birth to obtain lawyers. But at the time, there was no such law, and experts debate whether such deals are legally binding.

Robert Walmsley, past president of the Academy of California Adoption Lawyers and an expert on surrogacy, said that even poorly drafted, the Dodge-Nixon contract spelled out their intent, a key factor in disputed surrogacy cases.

Caplan, the bioethicist, is doubtful.

“I can say, ‘I can't contract away my parental rights,' ” he said. Caplan also questioned why Acacio agreed to conduct the procedure with a middle-age surrogate mother, for whom pregnancy could be dangerous, and with a biological father in his 70s.

“You don't really have anybody in a good position to raise the kids,” Caplan said. “It's never a good thing to do (in vitro fertilization) for a couple who will be entering a nursing home when the kids are entering high school.”

Acacio said that he could not talk about the Dodge-Nixon case, but that it was wrong to make blanket statements. Acacio said all parties in his surrogacy cases are cleared by a psychological counselor and surrogates over a certain age are checked by a maternal fetal medicine specialist.

“I take very seriously the responsibility I have to the unborn children,” Acacio said.

Legal experts say surrogacy custody battles typically hinge on the intention of the parties when the process began. In this case, however, babies were produced on a questionable surrogacy contract involving friends.

“This case would make a great law school exam,” said Orange family law attorney Thomas Stabile. “A lot of people will do things on the side to avoid the ethics or the law or, in some cases, both, to get a child.”

Based on the case as well as the lifestyle of the parties involved, family law attorney Leslie Ellen Shear said: “The result could be that surrogate and husband are parents, all three are parents, surrogate and wife are parents, just the wife is a parent or just the surrogate is a parent. I can come up with rationales to support each of those outcomes.”

As their financial troubles worsened, Nixon said she felt that the Dodges were growing distant toward her.

“I didn't feel as if it was as joyous as it should have been,” Nixon said. “By the time I got to delivery, I felt on the verge of total collapse.”

GROWING FAMILY

The triplets were born Oct. 19, 2010, at Saddleback Memorial Medical Center Laguna Hills. Kristina and her daughter, Laurenz, picked the babies' first and middle names: Tatiana Rose, Cozette Sophia and Alexandra Tate. Their last name, according to their birth certificates, is Nixon. They went home with Nixon and Kristina Dodge, said Nixon.

Nixon said there was no immediate attempt by Kristina Dodge to adopt the babies. But Kristina settled into the role of mother and Nixon as a favorite aunt.

“I carried them, I loved them, it's not like I said, ‘
hasta luego,' at the hospital,” Nixon said. “There's no fiber of my being that would allow me to carry children and let them go.”

She continued: “I don't believe what's in their best interest is to be away from us.”

Nixon's surrogacy case is scheduled to go before Judge Claudia Silbar on Monday. Nixon is acting as her own attorney.

Meanwhile, eviction proceedings have been started against Nixon, and the Dodges' bankruptcy case continues. In that filing, the Dodges report assets of between $10 million and $50 million, and liabilities in the same range. Documents show that $24.6 million in debt is for pledges, including $3 million to the Segerstrom Center for the Arts.

The Dodges recently told the TV show “Inside Edition” that they are so financially strapped that they've started hawking their furniture on eBay. And, they added, they are living on Social Security checks.

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